ISA Investment 101: Where Do I find ISA Deals to Invest In?

The ISA market, much like angel investment or VC market, does not have a systematic platform to invest through. The one notable exception is Angellist, which started out as a listing platform for early stage startup equity deals.

Many schools are using their own capital to set up ISA programs, and hoping to sell or issue new ISAs after they reach a certain point. However, balance sheet based ISA financing is not a particularly great model for an educational institution with fixed costs with a short duration. Right now, schools and investors are generally working through informal networks to connect to each other. Not surprisingly, the process is time consuming, uncertain, and inefficient.

The MentorWorks’ ISA Investor Information platform allows investors to see active ISA deals as well as schools that have existing ISA programs or are interested in setting up ISA programs. This platform is not a trading or a transaction tool, but allows communication between investors seeking ISA opportunities and schools seeking to establish or expand ISA programs.

The platform allows investors to learn about schools interested in ISA programs, and connects interested parties. It mitigates a major impediment to ISA investment, that is, information asymmetry about deals. MentorWorks is not charging schools or investors, and is currently providing this platform as a public service tool to increase market interest and investment in the ISA space. While MentorWorks can provide turnkey ISA program structure, we are not requiring that MentorWorks be involved in any part of a potential ISA transaction for now.

Once investors show interest in a school, we connect them to schools and help the school set up soft circle interest in their ISA program. The school can then set up a virtual data room to share diligence information sought by investors. Our platform will enable the creation of a syndicate by connecting interested investors to each other and to the school.

One key feature that we are allowing is for any investor to set up an alumni ISA program through the platform. This feature allows an alumni to set up a fund and invite other alums to consider investing in this program to students at a school. Such alumni based programs, somewhat well known in alumni investment in startups, can be an attractive for alum to support their schools and earn a financial return in the process or as evergreen non-profit funds. Alumni investors can set up parameters for the program and MentorWorks can support program design and management.

Once the deal is structured, we are happy to update the program information upon the election of the school and the investors. An updated program information on our platform can enable follow on and potential secondary investor interest in ISAs.

Currently, we are only letting qualified institutional investors and accredited investors access this informational platform. Eventually, we can expand it to unaccredited investors as well, but the regulatory and set up costs of doing this currently are prohibitive.

If you are an investor and would like to learn about potential ISA schools, please contact us at karthik@mentorworks.com. If you are a school, and want to get listed in our ISA program listing, please email us as well.

About the Author

Karthik Krishnan

Karthik is the CEO and Co-founder of MentorWorks Education Capital as well as a tenured Associate Professor of finance at Northeastern University and a former angel investor with Launchpad Venture Group. His teaching and research in the areas of entrepreneurship and education finance has made him a go-to-resource and thought leader on education financing having published various articles on the subject. He has mentored many students and assisted them in securing meaningful internships and jobs. Reach out to Karthik at karthik@mentorworks.com.